Kevyn Orr's Former (And Future) Law Firm Bills Detroit At Up To $1,000/Hour

July 09, 2013, 4:15 PM by  Alan Stamm

Not everyone faces what Kevyn Orr calls a haircut as part of Detroit's financial restructuring and emergency management.

David Heiman, a partner, billed for nearly at $150,000 in April and May at $976 an hour.

Jones Day, the law firm he'll return to after a year an a half of reshaping Detroit (or trying to), has hourly billing meters whirring for at least four dozen attorneys who give Orr research, analysis and other guidance -- including contingency plans for a Chapter 9 bankruptcy filing in federal court.

A New York legal publication, The AM Law Daily, got the first wave of billing records via a request the partnership couldn't refuse -- a Freedom of Information Act submission by reporter Sara Randazzo. The firm billed for 2,487 hours of work in March and April at up to $1,000 an hour.

Here's what else Randazzo reveals about the lucrative consulting gig:         

It pays to work for a financially crippled city.

In Jones Day's first month and a half acting as Detroit's chief restructuring counsel, lawyers from the firm billed the city $1.37 million, according to copies of billing statements obtained by The Am Law Daily through a public records request.

The six-week total amounts to more than one-third of what Jones Day is due under a contract signed in mid-March that is set to expire Sept. 15. If the firm continues billing at that pace, it will hit the maximum $3.35 million it is to be paid well before the pact's six-month term is up.

That may explain why the firm didn't include $425,575 in "discretionary write-offs taken after internal review," according to the publication. Another $363,314 was deducted for amounts exceeding preset ceilings, Randazzo says the records show.

Daniel Merrett, a 40-year-old associate at the firm, charges just $525 an hour for 160 hours on Detroit work this past spring.

Invoices do include more than $12,300 in Detroit visit expenses during six spring weeks:

  • Airfare: $9,152
  • Hotels: $1,752
  • Other travel costs: $1,432 

Meet the firm's billing leaders on this project:

  • David Heiman, partner in Cleveland office:153 hours billed at $149,419 ($976 per hour)..
  • Daniel Merrett, associate in Atlanta: 160 hours charged at $84,131 ($525 hourly rate).

Read more:  The AM Law Daily

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